Before trying some new Cleveland restaurant, you might first want to know whether other people like it. To find out, you might turn to Yelp, a website where anyone can post reviews of restaurants and businesses in various cities. Reviewers aren’t paid to write reviews on Yelp. But now a class action lawsuit has been filed by some of these reviewers under the Fair Labor Standards Act claiming that they should be.
Under the Fair Labor Standards Act, employers are required to pay employees at least the minimum wage (and overtime as applicable), unless one of the Act’s many exemptions apply. People who perform services for companies as “independent contractors” are not covered by the FLSA’s minimum wage or overtime requirements. Courts and the U.S. Department of Labor use various multi-factor tests to determine whether someone is an employee or an independent contractor. In essence, though, the “economic reality” of the situation determines whether a person is a covered employee under the FLSA.
It is not uncommon for employers to misclassify employees as independent contractors and then violate the FLSA by not paying them at least the minimum wage or overtime. People who perform work from their homes, like telemarketers or remote IT personnel, are a common example of misclassified employees. Other situations where employees are commonly misclassified as independent contractors include cable TV/telephone installers, car service drivers, and (believe it or not) exotic dancers.
In the Yelp case, the plaintiffs claim they should have been paid minimum wage for their time posting reviews. Whether they will succeed likely hinges on whether the Court considers them to be employees as opposed to independent contractors. The prevailing sentiment in the legal community, however, seems to be that the reviewers are more like independent contractors than employees. Looking at the factors for determining whether a person is an independent contractor or employee under the FLSA, we agree the Yelp class action plaintiffs have a steep hill to climb.
However these “Yelpers” fare in their lawsuit, some Cleveland-area employees are wrongly misclassified as independent contractors and denied the minimum wage or overtime to which they are entitled under the Fair Labor Standards Act. If you—or someone you know—might be one of them, consider seeking legal advice.